Monday, February 25, 2008

Defense Against Top 5 Aggressive Sales Tactics

Well performing sales people claim the ability of selling "ice to Eskimos"; in other words they expect you to give them money for useless crap. By understanding their underlying strategies, you can break the spell and avoid becoming chumps.

A typical Sales Pitch contains 5 major underlying schemes

1) Hope Creation
An investment adviser once said "Even Warren Buffet buys and holds for the long term..." implying that you could become as wealthy as Buffet if you only invested through his recommended funds.

Logically speaking, turning a few thousand dollars into several billion within a few decades, making 10-20% in the bullish years and losing 30-50% in bearish periods, presents a mathematical impossibility. In fact it gives a negative expectancy but that's for another discussion.
(Besides, Warren Buffet made his first few million applying short term arbitrage trading mostly along with selling life insurance, hence the sales person's connotation was a complete deception.)

2) Sense of Urgency
"The fund will become closed to investors by the end of the week, you must act now." They want you to rush, and avoid thinking rationally as if you do, you could realize how bad of a deal they offer.

Take your time when it comes to your hard earned money. Nobody has the right to rush you. Work through the numbers, check out the competitors, make sure you UNDERSTAND the risks involved.

3) Authoritative Appearance
"I've been in this business for 15 years, trust me..."

Do not trust strangers whose only motive lies in extracting wealth from the likes of us. If they really understand the industry so well, why do they still operate in that tiny little office, 9 to 5, struggling to pay the mortgage?

4) Unbiased Appearance
Many sales people like to present themselves as 3rd party entities, giving you a positive "review" of the product/service sold. It gives the illusion of trustworthiness. This aligns with the marketing concept of "placement" in movies or TV shows, where they push the subconscious suggestion of said product/service.

Everybody is biased, one way or another. Pushing a product as a 3rd party usually stems from more deceptive sales people, as they probably have more to hide about the associated product/service.

5) Fear
This is a popular tactic among TV commercials. They present you a problem, then their product/service as the easy fix. E.g. (paraphrasing) pimples will make you extremely unpopular, never get a date, or an invite to Christmas dinner (wooo, so much to fear!); UNLESS, you buy this cream/spray, whatever... You get the drift

Understand that these unfounded anxiety issues do not originate from a lack of advertised products/services.

Armed with the above, I sincerely hope you have become more ready against the sales deceptions.

2 Reflections:

Howard said...

man u r really very cool now!


Rocko Chen said...

Thank you very much for the awesome comment!